Often, specialist finance is used to bridge the gap between financial transactions. Property purchases can be dependent on a chain of transactions coming together smoothly. Where these chains break, bridging loans can keep an investment moving.
However, sometimes a bridging loan can also be affected, or even dependent, on other forms of finance. One of our underwriters recently supported a borrower who was using our funding to purchase a property, but who was also using capital from another asset towards it.
We had to work quickly to make sure this all aligned well, and worked with the client’s exit strategy. However, this isn’t a problem for us, as using various sources of finance, namely capital from other assets, to purchase a new property is something we see regularly.
Mitigating risks by focusing on the long term
To ensure the external refinancing would be wrapped up in time to keep this investment going, we sought confirmation from the 3rd party involved. What’s more, we worked with the borrower’s solicitor to ensure the source of the funds would be handled properly.
The underwriter also thoroughly went through the borrower’s personal details to make sure everything was accounted for. The valuation also confirmed the property held a lot of long-term potential, even with works needed to bring the asset up to scratch.
While the borrower planned to sell another asset for the exit strategy, there were also many other options available to them. As every 3rd party we worked with for this deal confirmed there shouldn’t have been any unforeseen issues, we were happy to progress.
Specialist finance is designed with complication in mind
Property investment can be complicated. There are multiple priorities to align, and commitments to square. Doing all this has become difficult in the current economy, where deals are pulled and criteria is tightened.
But, it’s these circumstances where bridging finance shines. Our products are designed to fit in with these complications. These can include chain breaks, delayed refurbishment plans, or tricky business plans.
If your clients are worried about how their complications may derail an application, it should be remembered that all our deals are underwritten from day one. Meaning, we’ll be working on those complications from the get-go.